Fidelis MGU reveals target and plan of action to reach net zero

Fidelis MGU, which recently separated from Fidelis Insurance Holdings, has set an interim target for its underwriting portfolio covering all emission scopes across the energy and aviation industries. The move is part of its commitment to reach net zero Insurance-Associated Emissions (IAEs) by 2050.

The Bermuda-based underwriter said in line with climate science as laid out by the Intergovernmental Panel on Climate Change (IPCC), an emissions reduction in the range 26-49% is required between 2022 and 2030.

Richard Brindle (pictured), group chief executive officer and chairman, said: “This is a meaningful step forward in our climate change strategy: we now have not only a long-term net zero goal but also a near-term target and a plan of action to get us there. We look forward to engaging with all our stakeholders as we make progress on this critically important issue.”

The company said its 2022 IAEs totalled 1.2 million tonnes of CO2 equivalent for our in-scope portfolio, with the portion covered by our 2030 target accounting for about 40% of the total.

Fidelis MGU said: “While we do not yet have sufficient basis for consistently assessing transition plans, it is clear what data we need to assess the trend of actual emissions.

“As an immediate next step, we will therefore start systematically requesting emissions data for the insureds we support. This will enable us to start building a view of whether insureds are delivering on decarbonisation commitments.

“Over the coming years, the frameworks and guidance around assessing transition plans will mature, allowing us to integrate a forward-looking perspective into our approach.”

The company said it already has an existing guideline in place which requires oil and gas clients to have a commitment to reducing emissions, in line with the ambition of the Paris Agreement. This will come into force from January 1, 2024.

“We expect that over time, the emissions of most of our insureds will reduce significantly,” Fidelis MGU said. “We will increasingly engage with insureds over the coming years to encourage them to transition, and to expect stronger underwriting action only where we see no willingness to commit to transition. We are also exploring new products to support the transition to a greener economy and meet the emerging needs of our clients.”

The company said it already uses its underwriting capabilities to support risks with positive climate and environmental impacts.

“We write a significant amount of renewable energy business, backing 46 gigawatts of power generation across construction and operation of wind and solar farms,” it said. “Our property and reinsurance businesses help improve resilience in the face of climate change, while some of our political risk products assist governments in their broader environmental efforts (such as Ecuador’s debt-for-nature Galapagos conservation bond).”

It added: “We track our operational carbon emissions including a full assessment of Scope 3 categories, and we offset more than 100% of this using high-quality carbon offsets certified by Plan Vivo.

“For 2022, our operational carbon footprint of 11.8 tonnes of CO2 equivalent was offset at 110%. In doing so, we supported the CommuniTree reforestation project in Nicaragua, the Yaeda-Eyasi project conserving land in Tanzania, and the Trees for Global Benefits project in Uganda.”

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